RESTRICTED  
  
S/CSC/W /73 
 
7 March 2022  
(22-2089) Page: 1/4 
Committee on Specific Commitments  Original: English  
 
COMMUNICATION FROM TURKEY  
IMPLEMENTATION OF SPECIFIC COMMITMENTS AND ARTICLE II (MFN) ON  
CROSS -BORDER SUPPLY OF ROAD TRANSPORTATION SERVICES  
The following communication, dated 7 March 2022, is being circulated to the Members of the 
Committee on Specific Commitments, at the request of the delegation of Turkey.  
 
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1  INTRODUCTION  
1.1  Importance of the sector  
1.1.  International logistics maintains its eminence in global trade. Costs relating to logistics services 
continue to be a k ey factor for the competitiveness of exporting companies and SMEs. Besides actual 
costs, the time value of logistics continues to have great implications for company operations.  In 
terms of international freight transportation, businesses continue to be i n dire need of a predictable 
international legal infrastructure with efficient and business friendly practices.  
1.2.  Covid -19 pandemic as well as geo -political developments of different nature keep reminding 
us the importance of a sound logistics infrastructur e for the smooth functioning of the global trading 
system.  
1.3.  With the rise of electronic commerce transactions, the demand for door -to-door logistics 
dramatically increased and the reflections of this high demand is observed mostly on the road 
transport ser vices which lie at the heart of the e -commerce logistics chain.  
1.4.  Another negative impact of the pandemic was the container crisis, which resulted in rocket high 
freight charges and also affected the demand on other modes of transport alternative to maritime , 
including road transport.  
1.5.  In practice, international governance of road transportation arrangements is accorded at 
bilateral level, particularly the Bilateral Road Transport Agreements (BRTAs ), with their implications 
of quotas, fees, charges and other rules and procedures, which may translate into a domain that is 
inconsistent with the ideals of liberalization in trade of goods and services.    
1.6.  While freight transportation is a service in its elf, it is also critical in terms of boosting 
merchandise trade. Hence, while liberalization of road transportation services should be seen as an 
important component of the GATS; it also carries a potential of a multiplier effect in trade of goods.  
1.7.  In thi s framework, we would like to highlight the questions associated with the interpretation 
of specific commitments on cross border supply of road transport services inscribed in Members’ 
schedules as well as the implementation of the MFN Article of GATS. The refore, the purpose of this 
paper is to promote substantive discussion with regard to these questions, exchange views among 
Members about how they interpret these commitments and explore the possibility of establishing an 
“Understanding” for the interpreta tion of specific commitments and MFN in cross border supply of 
road transport services.  S/CSC/W /73 
 
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  2  BACKGROUND OF THE QUESTIONS  
2.1   Projecting  the sector reality  onto GATS  commitments  
2.1.  In the Services Sectoral Classification List (document MTN.GNS/W/120, hereinafter W/12 0), 
road freight transport is one of the sub -sectors listed under category 11.F, "Road Transport 
Services". The corresponding UN Provisional Central Product Classification (CPC Prov) code is 7123.  
2.2.  According to the Background Note prepared by the Secretari at on Road Freight Transport 
Services (S/C/W/324) "international road freight transport services" can be defined as road freight 
transport between a place of loading and a place of unloading that are located in two different 
countries, which mainly corresp onds to a mode 1 notion of trade as defined in Article I -2(a) of the 
GATS. Similarly, the Scheduling Guidelines (S/L/92) determines “international transport” as one of 
the prominent examples of cross border supply.  Therefore, it can be interpreted that th e 
specific commitments undertaken by a Member for CPC 7123 under Mode 1 corresponds 
to the commitments in international road freight transport services.  
2.3.  In the field , bilateral traffic -sharing agreements are the predominant method for governance 
of interna tional road freight transport. Through these agreements the number and conditions of 
permits for different types of carriages are negotiated.  The number of permits is called “the quotas” 
and there are mainly four different types of permits:  
a. transport betw een the territories of the two Contracting Parties ( bilateral transport );  
b. transport between a point in the territory of the other Contracting Party and a point in the 
territory of a third State, ( third country carriage ); 
c. unladen entry  (bilateral and/or th ird country carriage) ; and  
d. transit  transport.   
2.4.  With regard to the exercise we have conducted in order to understand the reflection of this 
permit system in the GATS, we considered that bilateral transport and third country carriage may 
well be covered by the cross border supply mode as long as the carr iage (the service) is supplied 
“from the territory of one Member into the territory of any other Member”. As regards the unladen 
entry, however, it is questionable whether an empty truck to enter the territory of a Member is –by 
itself- the supply of a ser vice or should we consider entrance of an empty truck as part of the service 
supply, considering that the truck will be loaded and eventually complete the contract of a service. 
Another question is how much of transit transport can be covered by the GATS, assuming that the 
carriage is from the territory of one Member into the territory of another Member, through transiting 
the territory of a third Member.  
2.1.1   MARKET ACCESS COMMITMENTS  
2.5.  Ultimately what is important is determining the obligation (specific commitm ent) undertaken 
by a Member. In that respect, we have first analysed the market access commitments of Members 
and their compatibility with the applied regime of permits.  
2.6.  The Scheduling Guidelines (S/L/92) indicate that a Member grants full market access in  a given 
sector and mode of supply when it does not maintain in that sector and mode any of the types of 
measures listed in Article XVI. Four out of six types of measures listed in Article XVI comprise of 
quantitative restrictions (sub -paragraphs a -d), inc luding absolute numerical restrictions such as 
quotas. In other words, a Member who undertakes full commitment (inscribed in the schedule as 
“None”) shall not impose quantitative restrictions, including quotas, in the committed sector and 
mode of supply. I n that framework, if a Member inscribes “None” into its schedule for Mode  1 
in CPC 7123, that Member may not impose quotas on international road freight transport 
services, particularly on “bilateral transport” and “third country carriage”.  
2.7.  However, we obs erve that Members who have full market access commitments for Mode 1 in 
CPC 7123 continue to negotiate permits and apply quotas for international road freight transporters 
of other WTO Members. Some of these Members claim that their MFN exemptions provide them the S/CSC/W /73 
 
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  ability to apply quotas as opposed to their market access commitments. Yet, again, according to the 
Scheduling Guidelines: “ Where an MFN exemption has been granted for a measure, a Member is 
free to deviate from its Article II obligations, but not  from its Article XVI and Article XVII 
commitments. Therefore, in such cases, a Member may accord treatment in that sector more 
favourable than the minimum standard to some Members, as long as all other Members receive at 
least that minimum standard of mar ket access and national treatment appearing in its schedule”.      
2.1.2   NATIONAL TREATMENT COMMITMENTS  
2.8.  The specific commitments  for CPC 7123 differ among Members. Some of them have full market 
access and full national treatment, while some has “Unbound” inscribe d for market access with a full 
national treatment commitment. The first case is easier to interpret as the Member should not 
restrict the market and not apply discriminatory measures to services and service suppliers of any 
other Member. But in the second  case, it is ambiguous where the obligation of non -discrimination 
between domestic and foreign service suppliers starts. In many cases, we observe that the applied 
regime is not in line with national treatment obligation as the committed Members still impo se 
measures like discriminatory fees, discriminatory treatment at the customs, border crossings and/or 
truck waiting areas.  
2.1.3   MFN OBLIGATION  
2.9.  The MFN obligation, stipulated by Article II of the GATS, requires that the most favourable 
treatment actually accor ded in all sectors, whether the subject of a commitment or not, must also 
be accorded to all other Members unless there is an MFN exemption listed by that Member.  In this 
respect, a Member who hasn’t listed an exemption for international road freight tran sport services 
may not differentiate the conditions between other Members, even if it did not undertake any specific 
commitments on market access and national treatment.  
2.10.   According to our observations, some Members who have no MFN exemptions listed for 
international road freight transport sector apply different truck quotas to different 
Members/countries based on its preferential BRTA regime.  
3  TURKEY’S PROPOSAL  
3.1  Questions  for discussions  
3.1.  Considering the importance of the sector and increasing demand for these services followed by 
the pandemic; as a first step, the Turkish delegation suggests that Members of the Committee on 
Specific Commitments engage in substantive discussions and exchange views about the 
interpretation and implementation of commitments on cross border supply of road freight transport 
services. The preliminary questions that Turkey would like to bring to the attention of the Committee 
are the following:  
a. Do you think that imposing certain annual truck quotas to a WTO Member is in line with  
the full market access commitments under mode 1 in CPC 7123? What kind of policy space 
does the quota imposing Member have if it has listed an MFN -exemption for that sector?  
Sector or Subsector  Limitations on Market 
Access  Limitations on 
National Treatmen t Additional 
Commitments  
F.Road Transport 
Services  
(b) Freight 
transportation 
(CPC7123)  1) None  
2) - 
3) - 
4) - 1) - 
2) - 
3) - 
4) -  
 
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  Sector or Sub 
sector  Description of measure 
indicating its 
inconsistency with 
Article xx on MFN  Countries to 
which the 
measure 
applies  Intended 
duration  Conditions 
creating the 
need for the 
exemption  
Road Transport 
Services  To grant, on the basis of 
reciprocity, the privileges 
about the quotas and 
fees, the exemptions 
from the permission 
procedures.  
 All countries 
with which 
agreements are 
or will be in 
force.  Indefinite  .... 
 
b. What do you understand from “none” in national treatment column, with “unbound” 
inscribed in market access column? If entering the market is equal to the entry into the 
territory, then where do you think the national treatment obligation starts, in the case 
where the real market situation is regulated by quotas? (e.g. after the border crossing or 
customs point?)  
Sector or Subsector  Limitations on Market 
Access  Limitations on 
National Tre atment  Additional 
Commitments  
F.Road Transport 
Services  
(b) Freight 
transportation 
(CPC7123)  1) Unbound  
2) - 
3) - 
4) - 1) None  
2) - 
3) - 
4) -  
 
c. In a case where a Member didn’t undertake any market access or national treatment 
commitments but also didn’t list any MFN exemption, is it compliant with the GATS if that 
Member applies different quotas to Members or non -Members?  
3.2.  As a second step, Turkey would like to ask the Membership to explore the possibility of 
establishing an “Understanding on Interp retation of Obligations in Cross Border Supply of Road 
Freight Transport Services”.  
3.3.  We believe that further discussion will help to a better understanding of specific commitments 
and MFN obligation for this important sector and improve the transparency, pr edictability and 
relevance of our road transport commitments for trade negotiators and business people.  Therefore, 
the Turkish delegation looks forward to hearing the views of other delegations on the subject and to 
joining the exchange of views on the que stions.  Based on the interest shown Turkey would be ready 
to work on the revision and expansion of this communication for more in -depth discussion in the 
coming meetings.  
 
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